ReNew Power To Invest $1.2 Bn For Country's 1st Round-the-clock RE Project

ReNew Power will invest close to $1.2 billion in development of a 1.3 Gw of hybrid renewable energy (RE) project, which will provide round-the-clock (RTC) renewable power supply, a first for the country. The company won the project in May 2020 in a tender issued by central agency Solar Energy Corporation of India (SECI) by quoting a tariff of Rs 2.9 per unit.

The company would set up the cumulative capacity at three locations – Karnataka, Maharashtra and Rajasthan. The hybrid capacity would include 0.9 Gw wind power, 0.4 Gw solar power along with corresponding battery storage. The company is expecting that the plant load factor (PLF) or the operating ratio of the hybrid power unit would be to the tune of 80 per cent.

“The project will be designed to operate at an 80 per cent average annual PLF and will have a minimum capacity utilisation factor of 70 per cent monthly, despite being a renewable energy project,” said the company in a statement to the paper. Power from this hybrid project is likely to be sold to northern and eastern states. SECI officials did not confirm the states.

The tender provides for 3 per cent tariff escalation annually for 15 years. The company said ReNew Power will supply the electricity in the first year at Rs 2.90 per unit and this tariff will increase by 3 per cent annually for the first 15 years. After which it will stabilise for the remaining 10 years of the 25-year contract.

POWER POINTS

• Company to set up 1.3-Gw of hybrid capacity with 0.9 Gw wind power, 0.4 Gw solar with corresponding battery storage
• Project to come up in states – Karnataka, Maharashtra, and Rajasthan
• Company won the project in May 2020 by quoting the lowest tariff of Rs 2.9 per unit
• 4. 3% tariff escalation for next 15 years

Industry calculations indicate that the average tariff over the life of the life of the project would come to around Rs 3.5-3.6 per unit. However, Sumant Sinha, CEO, ReNew Power told Business Standard last year that the rate would be lower than this. “I would say the number (average tariff) is lower than what you are mentioning (Rs 3.6/unit). To provide that kind of firmness of power, you do have to consider certain issues that you have to take care of,” he had said.

Prayas Energy Group in one of its analysis papers on the RTC scheme said, with a minimum 80 per cent annual capacity utilisation factor (CUF) requirement, coupled with stiff penalties for non-compliance, this (Rs 2.9 per unit) is “a very attractive price for the procurers”.

It said, “Minimising the excess generation through different combinations of wind and solar such that their profiles have a high level of synergy will become very critical to reduce the project risk.”

Sinha said in a statement: “With the signing of this PPA, ReNew Power and the Indian renewable energy sector has taken a historic step towards addressing intermittency of renewable power generation. We are pleased to sign this agreement which allows us to provide a value-added product to the electricity grid and offers us a competitive advantage for all such future bids.”

ReNew has obtained requisite approvals to connect the project sites with the grid and has secured connectivity through the inter-state transmission system, said the company.

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